Share
Explore BrainMass

Impact of non-discretionary fiscal policy on government revenue

Analyze the impact on governmental revenue and expenditures of nondiscritionary fiscal policy.

Solution Preview

Analyze the impact on governmental revenue and expenditures of nondiscretionary fiscal policy?

Nondiscretionary fiscal policy refers to deliberate manipulation of government spending, taxation, and purchases in order to promote macroeconomic goals. These are primarily for income maintenance purpose and are usually rarely changed. They include social security, welfare and unemployment compensation, economic growth and price stability.

Non- discretionary fiscal policy is built into the structure of federal taxes and spending. This is referred to as "nondiscretionary fiscal policy" or more commonly as "automatic stabilizers", contribute to keep economic system in balance without human control. These controls are built into the economy and so are called built in stabilizers.The progressive income tax (the major source of federal revenue) and the welfare system both act to increase aggregate demand in recessions and to decrease aggregate demand in overheated expansions. ...

Solution Summary

The impact of non-discretionary fiscal policy on government revenues are examined.

$2.19